Dominion Energy Inc. will now tie the vast majority of Chief Executive Officer Bob Blue’s compensation to how the company performs, with the change coming as the utility undergoes a “top-to-bottom” business review amid a year-long share slide.
(Bloomberg) — Dominion Energy Inc. will now tie the vast majority of Chief Executive Officer Bob Blue’s compensation to how the company performs, with the change coming as the utility undergoes a “top-to-bottom” business review amid a year-long share slide.
Blue’s non-salaried pay is now 100% performance-based, according to a company representative. Most of his stock award is now determined by the returns that investors make from holding corporate shares, known as total shareholder return, according to a SEC filing on Monday. Previously, a chunk of his pay package included a stock award that vested after he spent three years at the company.
“These modifications were approved to more closely align CEO compensation with long-term share price performance, consistent with the objectives of the current strategic business review,” the filing stated.
Dominion shares have fallen 4.2% this year, more than the S&P 500 Utilities Index. The stock is down about 25% from a year ago. Shares on Monday dropped as much as 1.8% in New York.
The Dominion board is putting more focus on the total share return as part of CEO performance, especially as the stock has lagged recently with potential policy changes and transformation efforts, Guggenheim Securities analysts led by Shahriar Pourreza said in a note Monday. “Aligning compensation with the stock’s performance should be received well,” the analysts wrote.
US companies have increasingly been emphasizing performance-related pay packages, executive compensation consulting firm FW Cook said in a report last year. During the bull market for stocks, those awards handed chief executive officers like Tesla Inc.’s Elon Musk huge payouts.
But this year, as company boards draw up pay packages for 2023, they may be changing these awards to appease shareholders after share price declines last year. Apple Inc. is cutting Chief Executive Officer Tim Cook’s compensation by more than 40% to $49 million in 2023, citing investor guidance and a request from Cook himself.
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